The hospitality industry is essential for tourism but also as an option for corporate travels and business conferences. Even when they’re not fully booked, these places have a large circulation of people. Therefore, hotels, motels, hostels, inns, and such establishments face several daily risks. below in this article, we will cover the Insurance Policies for the Hospitality Industry.
The chance of a catastrophe—like a facility being destroyed by fire, for example—is minimal, but business owners cannot disregard it. Some more common occurrences—like a guest slipping on ice—can lead to being sued for negligence. Rather than waiting for the worst-case scenario, hospitality business owners must ensure their company is adequately insured for all of these possibilities. Some insurance policies can help you in the face of the unexpected, ensuring that, like your guests, you aren’t disturbed either.
The Importance of Insurance
Many small business owners question the need for insurance coverage. Simply put, insurance can help cover the costs associated with property damage and liability claims. Without it, business owners may have to pay out-of-pocket for any legal claims against their company.
It’s good to remember that, depending on the incident, the episode could be financially devastating for your business—and even ruin the image of a small hotel or bed and breakfast forever if the case gets publicity. Some states require your business to have some insurance (such as workers’ compensation for employees), but it’s good to provide basic coverage even if it is not mandatory.
Commercial General Liability Insurance
General liability insurance protects your company from financial losses in the event of material or personal damage caused by the services you or your employees offer to a client. It’s the most important coverage you need in the hospitality industry. This policy can help you cover medical and legal expenses in cases involving the guest or their personal items.
Suppose a guest trips on the stairs or in the bathroom while taking a shower. If they believe the hotel’s negligence caused the accident, general liability insurance will help bare financial burdens. It may also cover cases such as a guest’s luggage damaged by your employees, the theft of personal items from inside a room, or even a lawsuit filed against the hotel alleging that the ads contain misleading information (like photos that don’t correspond to what was found).
Hotel, motel, and bed and breakfast employees are exposed to many risks and accidents at work. A recent article showed that housekeepers are responsible for many claims, as they are subject to slips and falls while cleaning rooms and often lift considerable weights during their work.
To prevent labor claims, you should have workers’ compensation. Its obligation varies according to state laws, but the coverage offered is essential if one of your employees suffers a work-related injury or illness. Workers’ comp helps cover expenses with wage replacement (while the worker is away), medical treatment, vocational rehabilitation if necessary, and other benefits.
Business Vehicle Insurance
If your company has its own vehicles, you need to consider auto insurance as well. This is especially true if you offer a shuttle service, taking and picking up guests from airports or offers any catering outside of the venue. This policy eases repair costs in the event of a car accident while also providing a car replacement in case of loss.
Liquor Liability Insurance
The hospitality industry usually works with alcohol in its restaurants and bars or room service. Liquor liability insurance protects your business if a guest drinks too much at your establishment and hurts someone else by accident (whether inside the hotel or while driving intoxicated), and also for any damages the drunk person may cause to the property of other guests. In many states, this insurance is mandatory for any business that manufactures, serves, or sells alcohol, so it’s good to check local laws.
Don’t Host Unnecessary Risks
Hospitality is an industry that offers a wide range of daily challenges. There are unpredictable events that can occur in any setting. It doesn’t make sense that small business owners also have to be concerned about the possibility of a lawsuit ending their financial reserves.
Even if you are a great manager, it’s difficult to keep up with everything that happens in a hotel, even a small inn or bed & breakfast. Luggage can be stolen, a guest or an employee can slip on a wet floor and get injured, among countless other incidents. With adequate insurance coverage, you avoid hosting all of these unnecessary risks as permanent guests of your business.